ING bank share Price and Benjamin Graham Value

Interest rates that ING receives have increased more quickly than the interest ING pays out to depositors. 

SECTOR: [FAIL]

ING is in the Financial sector, which is one sector that this methodology avoids. Technology and financial stocks are considered too risky to invest in. Several of Graham's criteria, like the Current Ratio and Debt to Current Assets, do not apply to financial companies. As a result, the company will not be able to pass this methodology, although we will include the remainder of the analysis for informational purposes.

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. ING's sales of €18 561 million, based on 2022 sales, pass this test.

LONG-TERM EPS GROWTH: [PASS]  Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. EPS for ING have increased by aorund 50% over the last 10 years.

EARNINGS YIELD: [PASS] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. ING's E/P of 10% using an average earnings over the past three years.

Graham Number value: [PASS] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. ING has a Graham number of √(15 x €1,4 EPS x 1,5 x €14 Book Value) = €21

Dividend: EUR 0,56 / EUR 12 = 5%

Conclusion April 2022: Now at a stock price of EUR 9,4 seems like a good time to buy ING. The price has fallen because of Russian exposure.

Conclusion November 2022: At EUR 12,3 the company in buying back shares which should increase book value and earnings per share in the future.